Can the banks get their hands on my pension

[jap]

Recently had a judgment lodged against me for a buy to let property which I got involved in with a couple of colleagues. I have no assets, other than the property itself. There are no personal guarantees signed on the loans. However, I have an Ark Life Executive Pension Plan with my employer for the last 15 years. There is a significant amount of money in this plan. I am 47 years of age. Can the bank get their hands on my pension ?????

 

[Raging Bull]

assuming you retire at 65 No. If you take early retirement in next 12 years then Yes......if you inherit money in next 12 years they will look for some of it

http://www.keepingyourhome.ie/enforcement_of_judgments.html.en

 

[jap]

Obviously it would not suit me to retire based on the fact that they could then access any lump sum that may be payable to me. Does this advice still work for an Executive Pension Plan. Also, there is a possibility that I will be made a director on the near future, do you know will this anyt

 

[Jim Stafford]

If the bank is patient, they could seize some of your pension. Banks are now very alive to the value of pensions. Public Sector workers can be particularly exposed as they cannot control the payment of the lump sum gratuity payment which they receive.

Pensions and bankruptcy comprise a very complex interface of pension legislation, bankruptcy acts and tax legislation, and a professional advisor would need to see all of the pension policy documentation to properly advise.

There are a number of reasons why we might advise a client to go bankrupt. Protecting a pension pot is one of them. You will note from my comments below that your pension is effectively at risk if you are ever within a 5 year window of being able to draw it down.

The Personal Insolvency Act 2012 introduced two new provisions into the 1988 bankruptcy Act relating to pensions on bankruptcy. Section 44A (subject to the paragraph below) of the Bankruptcy Act now provides that assets under a relevant pension arrangement (other than payments already received or which the bankrupt was entitled to receive) shall not vest in the Official Assignee. A relevant pension arrangement is defined in the section and includes a retirement benefits scheme, retirement annuity contract, PRSA, overseas pension plan etc.

Section 44A goes on to provide that if the bankrupt is entitled to perform an act or exercise an option under the relevant pension arrangement which will result in the bankrupt receiving any amount of money (i.e. a pension or lump sum), that amount of money shall vest in the Official Assignee. In addition, the Official Assignee will be entitled to perform that act or exercise that option on behalf of the bankrupt. This will apply to acts which can be performed or options which are exercisable by the bankrupt prior to or at the time of the bankruptcy or at any stage within 5 years of the bankrupt being adjudicated bankrupt.

The Court also has the power to make Bankruptcy Payment Orders directing any person from whom the bankrupt is entitled to receive any pension to pay the pension directly to the Official Assignee or trustee. However, reasonable provision must be made for Reasonable Living Expenses. In addition, a spouse may be able to make a claim for a beneficial interest in a pension fund.

In conclusion, you should really try and reach a settlement with the bank now for the residual debt.

Jim Stafford

 

[jap]

Wow Jim that is brilliant information and incite. How much do I owe you !!!!!!!
Problem I have is that
(a) I am dealing with BOI and they do not seem to be doing any deals of any sort.
(b) I am involved with three others who all have nothing to put into the pot for the sake of negotiating a deal. Afraid that BOI will look and see that I am the only person with any sort of an asset, albeit hopefully, they cannot get at.
(c) Have my family home, married with 3 kids. Mortgage in mine and wife's name, and their is positive equity I ever sold. Again have no intention of ever selling, THEY CANNOT MAKE ME, CAN THEY ?

Sorry for going on a bit .....

 

[mf1]

(c) Have my family home, married with 3 kids. Mortgage in mine and wife's name, and their is positive equity I ever sold. Again have no intention of ever selling, THEY CANNOT MAKE ME, CAN THEY ?

Judgment mortgage

mf

 

[Gerry Canning]

If the bank is patient, they could seize some of your pension. Banks are now very alive to the value of pensions. Public Sector workers can be particularly exposed as they cannot control the payment of the lump sum gratuity payment which they receive.

Pensions and bankruptcy comprise a very complex interface of pension legislation, bankruptcy acts and tax legislation, and a professional advisor would need to see all of the pension policy documentation to properly advise.

There are a number of reasons why we might advise a client to go bankrupt. Protecting a pension pot is one of them. You will note from my comments below that your pension is effectively at risk if you are ever within a 5 year window of being able to draw it down.

The Personal Insolvency Act 2012 introduced two new provisions into the 1988 bankruptcy Act relating to pensions on bankruptcy. Section 44A (subject to the paragraph below) of the Bankruptcy Act now provides that assets under a relevant pension arrangement (other than payments already received or which the bankrupt was entitled to receive) shall not vest in the Official Assignee. A relevant pension arrangement is defined in the section and includes a retirement benefits scheme, retirement annuity contract, PRSA, overseas pension plan etc.

Section 44A goes on to provide that if the bankrupt is entitled to perform an act or exercise an option under the relevant pension arrangement which will result in the bankrupt receiving any amount of money (i.e. a pension or lump sum), that amount of money shall vest in the Official Assignee. In addition, the Official Assignee will be entitled to perform that act or exercise that option on behalf of the bankrupt. This will apply to acts which can be performed or options which are exercisable by the bankrupt prior to or at the time of the bankruptcy or at any stage within 5 years of the bankrupt being adjudicated bankrupt.

The Court also has the power to make Bankruptcy Payment Orders directing any person from whom the bankrupt is entitled to receive any pension to pay the pension directly to the Official Assignee or trustee. However, reasonable provision must be made for Reasonable Living Expenses. In addition, a spouse may be able to make a claim for a beneficial interest in a pension fund.

In conclusion, you should really try and reach a settlement with the bank now for the residual debt.

Jim Stafford

Jim. Great advice again.
.............................
From reading JAPs thread and Jims comments , unless the amount in pension fund is huge ,I do not see Bank going to the trouble of chasing his pension.I think the comments I am now making are largely correct and if wrong please correct me.

1.It is a (private) pension, hence he does not have to take out a lump-sum on retirement @65.So no lump sum to grab.
2.In any event he would be allowed reasonable living expenses.
3.It takes circa 20,000 to get 1,000 annual pension @65 ,so unless fund is huge , he will be ok.
4. Do judgments not have to be acted upon within 12 years .So retirement is beyond that 12 years and maybe mortgage has 12 more or more years to run. Surely it is very unlikely they would go after his share of family home.

 

[44brendan]

THEY CANNOT MAKE ME, CAN THEY ? QUOTE]
There is a possibility of a judgement holder progressing a JM over a property to a Well Charging Order and Order for Sale. However, this process is expensive and time consuming and given that the property in question is a family home there is a low possibility of a Court granting an Order for Sale over the property in the current legal climate.

 

[jap]

Gents,

Thanks for the replies so far, they are a great help.
The amount in the pension pot is sizeable, probably €300k at the moment. I have an Executive Pension Plan for about 15 years +.
Does anybody know if my status changes from being just an employee of the company Ii work for to being a non propretiary director, has this any affect on my ability to draw down my pension early. As said before, I do not want to draw my pension and furthermore based on the circumstances of the debt that I now owe, I don't want to be able to draw down my pension.

 

[jap]

Also, does anybody know, if bank gets the judgement and sits on it for a period of time before registering it, does the 12 year rule only start when they register the judgment or when it was granted by the courts ?

 

[Jim Stafford]

On a public forum such as this I cannot comment about policies of individual banks. However, I can make the general observation that Irish based banks are more patient than foreign banks who are exiting the market place, and also more patient than funds which have purchased debt.

I would not write off your 3 co-investors yet. They might inherit money etc, and contribute to the residual debt.

You need a professional to carefully review the pension docs to see what the pension position is. Essentially, if you are within 5 years of being able to draw down your pension, then the Official Assignee could step into your shoes and seek the 25% lump sum.

You may need to examine if your spouse could make a claim for a 50% beneficial interest in your pension fund.

In respect of the family home, it is practically impossible to enforce a judgment mortgage which is against just one joint owner. The judgment mortgage lasts 12 years from date of judgment. However, any bank could effectively realise your equity in the family home by making you bankrupt.

Jim Stafford

 

[jap]

On a public forum such as this I cannot comment about policies of individual banks. However, I can make the general observation that Irish based banks are more patient than foreign banks who are exiting the market place, and also more patient than funds which have purchased debt.

I would not write off your 3 co-investors yet. They might inherit money etc, and contribute to the residual debt.

You need a professional to carefully review the pension docs to see what the pension position is. Essentially, if you are within 5 years of being able to draw down your pension, then the Official Assignee could step into your shoes and seek the 25% lump sum.

You may need to examine if your spouse could make a claim for a 50% beneficial interest in your pension fund.

In respect of the family home, it is practically impossible to enforce a judgment mortgage which is against just one joint owner. The judgment mortgage lasts 12 years from date of judgment. However, any bank could effectively realise your equity in the family home by making you bankrupt.

Jim Stafford

Jim,

Again, thanks for that. I have asked my pension provider for the information that I think I may need, but as you suggest, I think the best option is to talk to a professional who can stand over the advice given. I will look into the option of the 50% beneficial interest as outlined above also.